Digital currency trading firm Genesis Global filed for bankruptcy on Jan 20, 2023, citing ‘adverse market conditions’. They are likely to complete their bankruptcy by this year May 19. This filing only applies to certain branches of the company and its Global trading and spot and derivatives trading arms are still operational and unaffected. This news has created a stir in the market and the next hearing is on Jan 23.
Background on Genesis Global Trading Bankruptcy Filing
Genesis Global Trading is a digital currency trading firm that was founded in 2013. It grew as a reputed OTC (Over-the-counter) trading firm in the crypto market. On Jan 20, it filed for chapter 11 bankruptcy which causes a stir in the crypto industry. The company is likely to liquidate its assets to pay off the creditors.
Digital Currency Group Denies Involvement
Digital Currency Group (DCG) is a venture capital firm founded by Barry Silbert and has invested in a number of crypto-related companies. The DCG is also the parent company of Genesis Global Trading. DCG responded to the bankruptcy filing stating that it has no involvement in the filing and the decision was made independently by the Genesis management team.
In the statement, they further clarified that DCG still owes Genesis Capital a lot of money. $526 million is due in May 2023 and another $1.1 billion is due in June 2032. DCG said they will help Genesis pay back its creditors very soon.
DCG has also responded to the false accusations made by Gemini related to the Gemini Earn program. They said that the threat of a lawsuit by Gemini is another publicity stunt from Cameron Winklevoss to remove the blame from himself and Gemini. They have also stated that any suggestion of wrongdoing by DCG or any of its employees is baseless and completely false. DCG assured that they will continue to engage in constructive negotiations with Genesis and its creditors with the goal of arriving at a solution that works for all parties.
Stellar – One of the biggest creditors of Genesis
The Stellar Development Foundation, which is one of Genesis’s biggest creditors, claimed almost $13 million from Genesis. However, the foundation stated that this amount is small compared to its overall assets. The Stellar treasury currently holds around 30 billion XLM tokens, which are worth over $200 million. Therefore, the foundation will not be affected by Genesis’s bankruptcy filing.
Impact on the Crypto Market
The bankruptcy filing of Genesis Global Trading has raised a number of questions about the stability of the crypto market. Some have pointed out that the filing is a sign that the market is still in its early stages and that there are still a lot of risks involved. The hearing for this case is set to take place on January 23rd and it will be interesting to see how this plays out and what the ultimate impact on the crypto market will